Promotion spending exceeded advertising spending last year with $233.7 billion spent on consumer promotion compared to $211.7 billion on ad expenditures, according to a survey conducted by PROMO magazine and the Promotion Marketing Association.
In other good news for the promotions industry, 57 percent of brand marketers’ marketing dollars went into trade or consumer promotion, with 37 percent going to consumer advertising.
The survey also found that the total dollars spent in a number of tactics increased. Event marketing increased 6 percent from 24 percent in 2001 to 30 percent in 2002 followed by 5 percent increases in both contests and sweepstakes (16 percent to 21 percent), sponsorships (12 percent to 17 percent), couponing (14 percent to 17 percent).
The most dramatic drop in spending was in co-marketing, which fell 13 percent from 28 percent in 2001 to 15 percent in 2002. Spending for direct mail, P-O-P displays and premium incentives held steady from 2001 to 2002.
“Promotion is increasingly used as a marketing tool — one that is not only attracting the attention of the consumer, but senior level management as well,” said Kathleen Joyce, editor, PROMO magazine. “Over half of the respondents (52.6 percent) indicate that promotion is built into their marketing plans from the start — reinforcing its prominent place in the marketing mix.”
Online promotions lead the pack as the top promotion tactic utilized in 2002 by 15 percent of total respondents, followed by research at 13 percent and in-store initiatives at 10 percent. In 2001, the top three tactics used were trade shows (26 percent), online promotions (26 percent) and tie-ins and alliances (17 percent), the study found.
As for measuring return on investment (ROI)–a benchmark becoming ever more important as promotion budgets shrink and CEOs look for tangible results–nearly 70 percent of brand managers said that measuring their promotions’ ROI would be a higher priority in 2003, compared to 44 percent in 2002 who reported that they did not measure ROI on promotions.
In fact, C-level executives–CEOs and presidents–are more often than not (57 percent of the time) present during promotion strategy sessions. Also at the sessions are directors of promotions, promotion managers, brand managers, assistant brand managers and promotion agency executives.
Also gathering steam is targeting promotions to specific groups rather than a general audience with 53 percent of all projects now being geared toward specific groups.
The complete survey, 2003 Promotions Trends Report, is available on PROMO magazine’s Web site at www.promomag.com.
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